Headlines over the last few weeks show an increasing willingness
to support failing banks and let Greece slide into insolvency,
even though Paris and Berlin are continuing to support the
country publicly.

"The bailout package merely protracts the solution to the crisis,
but a debt haircut would at least be the beginning of a
solution," German economist Herald Hau told Der Spiegel. "With a
debt haircut, around 80 percent of the costs would be carried by
actors in international finance -- from private investors, funds
and insurance companies...Taxpayers
would be hit less hard."

Analysts estimate that European banks would lose about $350
million if Greece defaults. While that number is substantially
higher than the approximately $150 billion the eurozone will
likely spend on a second bailout, a recapitalization of this
magnitude may prove a smarter investment if EU countries have to
recapitalize their banks anyway.